Journal of 25 y/o American retiring to 3rd world country

Where are you and where are you going?
jacob
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by jacob »

@Ybodon - It's a cold war term. The 1st world was NATO countries/alternatively market economies. The 2nd world was Warsaw Pact countries/alternatively communist economics. The 3rd world was everyone else/alternatively other forms of government. I know that "developing" has become the PC standard but in some sense it's almost more offensive and quite normative at that too implying "not yet fully developed into a market economy".

JeanPaul
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by JeanPaul »

I actually haven't done a precise accounting of my retirement until today, but today I decided to take a look, and it's a bit worse than I expected.

In 39 months, I've spent approximately $29800, or about $763/month. Obviously this exceeds my $667 target. Fortunately, I've also picked up a little bit of extra cash along the way, about $3600 (mostly about $1650 from AirBNB and $1620 from online poker). So my net expenses have been about $670/month, almost perfectly on target. My expenses for a normal month were always well below this, so it's a little disappointing. Obviously there are extra travel expenses, but in many case these were offset with AirBNB. Anyway, it's hardly a tragedy, but it would be a little more comfortable with a slightly greater margin. Unfortunately, I neither play poker nor rent with AirBNB at the moment, so if anything it's a bit tighter.

My net worth 39 months ago, when I started this thread, was $193,000 - now it is $191,500. That means my investment gains were about 23,700, or about 12.3% total. This is also not a great performance, considering that the US market has risen a lot in that time. However, my investments have always been skewed away from the US, with quite a bit in emerging markets, which have been pummeled. I don't regret that allocation just because of hindsight, though - I still feel like it is better to keep the US as a smaller part of my portfolio. Obviously spending 4%/year and returning about 4%/year, I almost broke even, but long-term returns average better than 4%, so I still feel confident.

Kriegsspiel
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by Kriegsspiel »

I came across this quote and I thought you'd enjoy it:
Another successful low-rent city is Berlin, which is now Europe's capital for contemporary culture and its most exciting bohemian youth city. Low rents in Berlin stem mainly not from deteriorating infrastructure, but rather from previous overbuilding relative to current needs. Berlin was once Germany's leading economic powerhouse, but the Nazis and the Communists wrecked the place. It is a city built to be a business capital but is no longer anything close to a business capital. That means overbuilding and that means lots of things are remarkably cheap, at least by European standards. It's easy to rent an acceptable apartment in a non-peripheral part of Berlin, not too far from a subway or streetcar stop, for a few hundred dollars a month. Food too is much cheaper than in the rest of Western Europe.. There are many thousands of people in Berlin simply living on low rent, to "get by." It's the ultimate slacker city.

- Tyler Cowen, Average Is Over

JeanPaul
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by JeanPaul »

Well, the next step is finally taking shape! We're leaving Berlin on December 1st, meandering to Madrid via Thessaloniki, Georgia and Italy (the four flights for a total of 65 Euros!) over the course of a few weeks, spending Christmas and New Years in Spain with my girlfriend's family (including her sister, who's coming in from Peru), flying to California in mid-January (180 Euros, 1-way), spending a few weeks with my family, then heading off to Asia!

Where exactly in Asia, though, is still up for grabs. Basically, there are two overarching possibilities - 1) Spent a year in one place, as before, 2) Spend 3-4 months in 4-5 difference places for more like a year and a half. I tend to support option 1, while my girlfriend supports option 2, or even more extreme, spending just a month or two in different places.

Option 2 makes sense in Asia because I think that, even in a year, it will be hard to really integrate, since the languages are much more difficult, the cultures much more different, and appearances much more distinctive. A year as a quasi-tourist would be too much, so exploration of different places would be more exciting. Plus, it's hard to find anywhere in Asia with bearable weather for the whole year.

Costs are generally low in Asia, so the main variables are weather (avoiding excessive heat, humidity, and monsoons), language, and variety of cultures. Our general shortlist of places is:

Penang, Malaysia
Taichung or Kaohsiung, Taiwan
Kochi or Trivandrum, Kerala, India
Chiang Mai, Thailand
Kyoto, Japan
Hanoi, Vietnam
Busan, Korea
Bandung, Indonesia

Even though each of these places has at least a few unbearable months individually (especially in summer), by spending shorter chunks in each place, I can design a pretty solid weather year (although many places in South America are better, just staying in one place):

Average low and high, hours of sunlight, inches of rain
January: Kaohsiung - 67-75 degrees, 175 hours, 0.6 inches
February: Kaohsiung - 62-77 degrees, 166 hours, 0.8 inches
March: Kaohsiung - 67-80 degrees, 187 hours, 1.5 inches
April: Kyoto - 48-68 degrees, 175 hours, 4.6 inches
May: Kyoto - 57-76 degrees, 181 hours, 6.3 inches
June: Kyoto - 66-82 degrees, 138 hours, 8.4 inches
July: Trivandrum - 74-86 degrees, 150 hours, 7.4 inches,
August: Trivandrum - 74-86 degrees, 167 hours, 6 inches
September: Trivandrum - 74-87 degrees, 173 hours, 6.7 inches
October: Chiang Mai - 72-89 degrees, 202 hours, 4.6 inches
November: Chiang Mai - 67-85 degrees, 216 hours, 2.1 inches
December: Chiang Mai - 60-84 degrees, 254 hours, 0.6 inches

The language issue is one I haven't quite been able to resolve, though. On the one hand, I do want to learn a language. However, there are two problems - the languages are much harder than European languages, and if we move around, I won't have time to really learn enoughg.

1) I could just say screw it, and stick with English - in India and Malaysia, English is a lingua franca, and in touristy places like Chiang Mai, it's obviously easy to get by with it.

2) Another option would be to learn Malay - it's one of the easiest languages in the world, written with a Latin alphabet, without tones, declensions, gender, conjugation etc. And it's quite useful, spoken by 200+ million in Malaysia and Indonesia. Still, that would probably require spending a year between Malaysia/Indonesia, which my girlfriend is not a big fan of.

3) Most obvious option would be to learn Mandarin - I could learn it in Taiwan, where it's the official language, Malaysia (where 40% of the population in major cities is Chinese), and practice everywhere in the world, since there's no shortage of Chinese. The problem is, I think it might just be too damn hard. It's not so much about the difficulty of learning to speak it well, but of speaking it mediocrely. Japanese, for example, is equally hard to master, but if you can hack out some pidgin-Japanese, putting simple words together with lousy grammar, you will be understood. The same is not true for Chinese, because of the tones - pidgin Chinese is simply incomprehensible. So at the moment I'm trying out studying a little Mandarin, to see if I think it's realistic.

Anyway, I've never even been to Asia, so I welcome any wisdom, whether about places to live, languages, etc! Has anyone else here retired to Asia?
Last edited by JeanPaul on Mon Aug 22, 2016 7:54 am, edited 2 times in total.

BRUTE
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by BRUTE »

the weather is probably not going to be that bad. yes, it gets hot and humid in the rainy season, but it's not unbearable. especially if JeanPaul doesn't HAVE to go anywhere like work.

language wise, yea, most of them are way harder than any European languages. brute has heard that to even achieve basic fluency (i.e. hold a 2 minute conversation, not just say the names of dishes and streets) takes at least a year in the tonal languages.

brute would be interested if JeanPaul achieves the cost of living he mentioned above in some of those places. in brute's experience, these places are 3-4x more expensive unless living without AC or hot shower, 2h one way from anything interesting, and already fluent to negotiate a price.

JeanPaul
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by JeanPaul »

OK, that would is worrisome, but important to know, since 3x-4x would be too expensive!

But from what I've seen, just glancing online for several minutes, prices really are low enough - e.g. http://www.mudah.my/Eden+Seaview+Middle ... 842334.htm
Negotiable list price is 310/Euros per month for a reasonably modern-looking 800 square foot place with AC, an ocean view, pool, gym etc. in one of the fanciest parts of Penang. Still more expensive than I said, but it's bigger, plus I wasn't looking for cheap - that was just a random selection from the first page of listings. The difference between 300 and 200 is pretty insignificant to me, anyway.

But Malaysia is already a developed country, so maybe the minimum standards are higher - which countries do you have that experience with? I would imagine apartments would be fine in Taiwan and Japan as well.

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Viktor K
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by Viktor K »

I double majored into Chinese in college and I can confirm it is very difficult compared to Western languages. The tones are the biggest difficulty, coupled with the regional variations. Some Chinese people couldn't even understand others from the next city over from ours. My girlfriend and I stayed only 6 months which made the biggest difference in my proficiency. Before China? My pronunciation was embarrassing even to my classmates. But after China my Chinese would last long enough in a conversation for the locals to suddenly assume I was fluent and take off speaking at break-neck speed, leaving me wide-mouthed and shaking my head.

We were also surrounded by English-speaking teaching assistants and of course my girlfriend and I only spoke English. That may have more or less of an effect on you. I think you'll benefit from the fact that the locals around you won't speak much English and you're used to learning different languages by this point (so you may have already worked around being surrounded by people who you don't need to speak the foreign language with).

Also, my girlfriend didn't know any Chinese when she went. She studied up, knows pretty much all the words I do, but didn't have much face-to-face practice, so her Chinese proficiency is still pretty low.

Everything about that language is hard, though. The tones are most killer, of course.

BRUTE
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by BRUTE »

oops. brute had assumed those figures in the post above were for total cost of living for a month. for rents, they seem just about right, maybe a bit on the cheap side.

UrbanHermit
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by UrbanHermit »

Hey JeanPaul, I've been following your journal since the beginning, and it's been a great read, thanks for not letting it slip into the archives like so many others (mine included, heh).

The Peru chapter was interesting in an adventure-travel kind of way, but not something I would seriously envision for myself long term. The recent details with budgets for Berlin however, have really got the wheels turning. I have more than enough cash to swing that, and there's a lot of Eastern Europe I haven't seen yet... :)

One thing I'm curious about: you're 3 years into ERE now and have been relatively settled in Berlin for a while, what does your day-to-day look like if you don't mind sharing? Are you actively working personal projects, hobbies, or side businesses, or just chilling? When you start the next leg of your journey in December, do you have any side-projects planned to work on as you go, or do you find the act of travelling involving enough to occupy your entire focus?

Noedig
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by Noedig »

Epic journal: you have done so much, and made some interesting and very independent choices. You certainly pulled the trigger early. I have an expectation that you will end up finding some other way to make money as your posts convey an awareness and opportunism in that direction.

Keep on feeding details, to those of us accumulating our escape funds: it provides vicarious enjoyment and a promise of the life to come. All the best to you.

Did
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by Did »

We spent a month in Thailand. We loooved it. Bangkok was an assault to the senses and we found it difficult to find our hotel. Loved Chiang Mai and its northern cousin Chaing Rai. After a month we returned to Bangkok and it was much more familiar.

We hope to return for a stint one day.

JeanPaul
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by JeanPaul »

UrbanHermit wrote:Hey JeanPaul, I've been following your journal since the beginning, and it's been a great read, thanks for not letting it slip into the archives like so many others (mine included, heh).

The Peru chapter was interesting in an adventure-travel kind of way, but not something I would seriously envision for myself long term. The recent details with budgets for Berlin however, have really got the wheels turning. I have more than enough cash to swing that, and there's a lot of Eastern Europe I haven't seen yet... :)

One thing I'm curious about: you're 3 years into ERE now and have been relatively settled in Berlin for a while, what does your day-to-day look like if you don't mind sharing? Are you actively working personal projects, hobbies, or side businesses, or just chilling? When you start the next leg of your journey in December, do you have any side-projects planned to work on as you go, or do you find the act of travelling involving enough to occupy your entire focus?
Yeah, it's definitely cheaper than one thinks, although I realize the precise details of my budget are lower than most people want to go - with low rent/buy ratios, no car needed (due to great public transport), much more affordable health systems, and cheaper groceries, the baseline in most of Europe is really so much lower than in the US.

One advantage of retiring so young is that I never got used to having work as part of my day. I basically went directly from a lazy college and law student who rarely went class to being retired - my brief stint of working was not enough for me to get used to it or even inured to it! Which is to say that it's pretty chill. I do have projects like learning languages, improving my chess (especially working on my opening knowledge), keeping my tennis in good form, experimenting with cooking, had my poker stint earlier, and my sister and I recently worked our way together entirely through a very long computer game called The Witness.

If I get a sudden interest - I'll pursue it, e.g.: read all the classics of Canadian literature, or the great works of alternative history. I always have time to do a lot of activities around the city - going to concerts, theater, art openings, lectures, board game nights, scavenger hunts, Couchsurfing meetups. But it's always centered more around leisure, a lot of reading and watching movies/TV, playing sports, watching and discussing basketball (I'm a huge fan), hanging out with friends, meeting strangers. I don't go often to Berlin's famous (mostly techno) clubs, but do spend a fair amount of time hanging out in bars (or rooftops or "beaches"), or going to parties at people's houses.

As I've talked about earlier, occasionally I feel a twinge that I'm not making progress, but never is there an actual shortage of things to do.

The one time there are fewer things to do, even in Berlin, is during the workday - believe it or not, a lot of people aren't available! Fortunately in Peru and Spain, my girlfriend never had a 9-5 job (plus youth unemployment in Spain is like 50%...), and in Berlin, my sister lived here while not working. But another tool I've used a few times recently is Couchsurfing Hangouts, where people make themselves available at that exact moment, list some activity they are interested in, and then you can see everyone listed by their distance from you and what they want to do. One person makes a request, and then if the other agrees they can meet up (or form a larger group). I've already hung out with travelers a couple of times, plus someone from Berlin whom I'll meet again (which is nice, because now I have a potential friend who lives nearby and is available during the day!)

I wouldn't mind having some kind of business (being self-directed and directly rewarded is a lot different than working a job), but I guess I'm not that entrepreneurial or creative - none has occurred to me, and I have zero interest in anything involving product shilling or SEO.

My dad is actually a better retiree than I (although he's had a 20 year or so head-start) - he shares most of my interests, but he also acts in theater and independent films, plays in a string quartet, plays bridge, enjoys tutoring kids music in chess (and makes good money doing it), etc. But some of those interests he's developed while retired - that's one of the advantages!

JeanPaul
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by JeanPaul »

Well, I'm settled into my new chapter in Asia. After traveling about 3 weeks in Thailand (fun, but too hot!), I am spending about 3.5 months in Penang, Malaysia. We rented a fully-furnished 3 bedroom, 2 bath condo a block from the beach. With cross breezes from the mountain in the back to ocean in front, we rarely need to use a fan, and haven't used the air condition yet. The facility has multiple swimming pools, gym, sauna, squash court, etc... but best of all for me, a tennis court. I have actually played 5 matches in the last 10 days or so (albeit only once at the courts of my condo - courts are typical at other condos as well), and there are quite a few country clubs, not to mention playing with my girlfriend a couple of times. We're really enjoying the food (Penang is a street food mecca, with dishes as cheap as $0.30, and almost nothing for more than $2), like the city itself a mixture of Chinese, Indian, Thai, and Indonesian/Malay influences, and have found the people friendly and open and easy to get to know. I'm keeping myself entertained, largely with tennis, but my girlfriend is a bit bored, however, partially due to a lot of repetitive work she has right now, partially due to feeling like Penang is provincial, lacking the kind of vibrant artistic scene and entertainment (and it certainly is no Berlin or Madrid).

In general, it's not too exotic an environment, besides the very hot weather, which makes it unpleasant to be out in the middle off the day, but a big pack of monkeys does live nearby and stole a tennis ball while I was playing once, there are large monitor lizards, and once a snake slithered onto our balcony.

The Malay language is definitely easy (to the extent a language with no common vocabulary can be), but it has proven tricky to learn, since the majority here speak Hokkien or other Chinese dialects as a first language, and English is the lingua franca (at festivals, political speeches, etc) - most bookstores stock almost exclusively English books. I'm in the unprecedented situation of being able to speak MUCH better than I can understand - I can say fairly complex things, but usually fail to understand even simple responses, even if I know the vocabulary - I am still just too unused to the spoken language. And language exchanges aren't really a known concept - I have arranged a couple of exchanges, for German-Malay and Spanish-Malay (no one's interested in improving their English, even though a lot of people don't speak very well), but both proved to be duds. Trying another this evening, so we'll see how it goes.

Good news is that it's quite a bit cheaper than any of my previous stops, with a total spending of $415 per month:
Rent: $178 per month ($356/month for the apartment, including a one time agent fee divided over three months)
Utilities + Internet + Phone: $18/month (water bill was slightly over a dollar for the month! electricity less than $8)
Groceries: $85 (Tesco delivers for $0.60 and actually unloads the food in our kitchen)
Restaurants: $35 (a total of 25 places, although a few were just coffee or a juice)
Transport: $23 (bus and Uber)
Entertainment: $28 (beers, tennis balls)
Miscellaneous: $4 (an HDMI cable to connect our laptop to the TV, some rope)
Getting here: $43 (the $360 flight to Asia divided over a year, the $45 bus and ultimately unused plane ticket to get here from Thailand divided over three months)

distracted_at_work
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by distracted_at_work »

Fascinating read! Serendipitous that you posted the day I head back home to Canada from abroad.

If I could mimic your expenses, I'm FI right now. That thought has put a spring in my step for sure :D

James_0011
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by James_0011 »

@distracted_at_work

Whats stopping you? If you have that kind of cash right now why not go for it? In the other thread I assumed you were talking about giving up on the FI journey, but it sounds like you have a lot of assets already.

distracted_at_work
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by distracted_at_work »

@James

I've thought about that a lot in the last two weeks. I should have articulated better in the other thread, I would never give up on becoming financially independent. I'll have 100K CAD in a brokerage account soon, yeah. 100 000K @ 7% = 7000 / Yr = $583/month * .75 USD/CAD = $437/month. Ignoring the gigantic assumptions in the math, my extremely brief reasons (I could write a long journal post on them) are:

-Celiac disease (difficult in a third world that doesn't understand gluten is in soy sauce).
-Leaving friends and family behind.
-No room for error if I go on such a small amount.
-Losing the momentum I have right now.
-Greed.
-Desire to build something/do something
+ more

@JeanPaul

It'd be much appreciated if you could possibly elaborate how you have managed any of the above that apply? Thanks for writing.

JeanPaul
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by JeanPaul »

While you did note you were making a giant assumption, a 7% withdrawal rate is clearly unsustainable:
http://www.firecalc.com/

"Here is how your portfolio would have fared in each of the 116 cycles. The lowest and highest portfolio balance at the end of your retirement was $-477,374 to $296,275, with an average at the end of $-60,702. (Note: this is looking at all the possible periods; values are in terms of the dollars as of the beginning of the retirement period for each cycle.)

For our purposes, failure means the portfolio was depleted before the end of the 30 years. FIRECalc found that 71 cycles failed, for a success rate of 38.8%."

Leaving friends and family behind is, of course, the toughest, but I am with my girlfriend, it is also cool to make new friends from very different backgrounds, and my parents have visited for at least a month in every location, as well as many of my friends in one or multiple locations (and my sister even came to live in Berlin). But it's not for everyone. Then again, many people live in cities across the country, and just see their family at a few holidays.

The amount does need to be larger, but I think there is actually some room for error at 3 or 4% - any wreck tends to be in slow motion, well-telegraphed with withdrawal rates well above 4%, so it will take more like 20 years to end up on the rocks, during which time you can find work or sources of income. With all the time and room to think, a lot of people find interests that happen to make them money without it being the main goal. Personally, I haven't found a whole lot in that vein, but actually recently I did start something that should bring some extra cash in the course of entertainment (we'll see how much that ends up being, but hopefully more than online poker!).

Greed is not a problem for me - I've never had many material desires. But it certainly depends on the balance in each person - how much they value freedom from work vs wealth, and I don't think early retirement is for everybody, or even most people.

The desire to build something/progress is often important, but I don't think there's any particular reason it should be tied to work, and certainly to your current profession - I would say it's quite a coincidence that those two things should match up, in fact. So having the free time and free brain to pursue other interests should allow you to build something - maybe that will turn out to be work (or maybe philanthropy, self-improvement, etc.), but it's probably not a kind of work that you would have had energy to develop alongside the 9 to 6. If your idea of building something is progressing up the corporate ladder or building a great fortune, that's harder to achieve, of course.

Celiac disease I can't speak to, but I guess that might necessitate living in a place where you know either the language or the food very well, or just mostly relying on home cooking (which I did anyway in Spain and Germany, where restaurants are relatively expensive).

thrifty++
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by thrifty++ »

Awesome good on you Jeanpaul. Looks like your having a nice time and for a long time.
I am hoping to head off and do something similar once I get to around $200k. Not for as long though just for maybe 5/6 months and then return to the corporate world after that - for a while anyways probably before heading off again when I hit $300k lol

JeanPaul
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Re: Journal of 25 y/o American retiring to 3rd world country

Post by JeanPaul »

I've never had a tennis court at my place before:
Image

Then again, I've never had to worry about this before! One monkey grabbed it, then the other two came to defend (/worship) it.
Image

Typical Penang street:
Image

Distinctive colonial style with Chinese influences:
Image

A mixture of old and new, East and West:
Image

The Chinese dominate the city even with only 40% of the population, and a patchwork of clans and dialects:
Image

Floating Mosque - Malay Muslims make up another 40% or so of the population (mostly in the outskirts)
Image

Indians are another 10-15%, many Sikhs imported as policemen by the British:
Image

Beach a block from our apartment:
Image

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Re: Journal of 25 y/o American retiring to 3rd world country

Post by Solvent »

It's awesome to read this, JeanPaul. Penang is a place I'm very interested in checking out for an extended stay in the future. I'm actually a bit surprised you manage to live as cheaply as that, there!

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